Malaysianization and the Barlow Boustead Estates Agency

The Malaysian government's New Economic Policy (NEP), introduced in 1971, provided a soft nationalization that did not involve coerced liquidation of foreign investments in the country. The government's approach rested on an 'expanding cake' theory, where the prospect of gains from economic growth would offset the loss of control through the sale of equity to local and indigenous investors. The NEP led to competition among foreign investors seeking to retain ownership up to the allowable limits, creating an unattractive environment for foreign capital that led to 'default nationalization'. This study examines the complex corporate divestment of the Barlow Boustead Estates Agency (BBEA), a major foreign-owned agency house in Malaysia whose owners eventually opted to sell to Government-backed institutional investors although they had no legal obligation to do so.